Nano-Proprietary now has the right to terminate its license agreement with
Canon it had made in 1999, according to the ruling by Judge Samuel Sparks of
the U.S. District Court for the Western District of Texas.

The licensing dispute was triggered when Canon licensed its agreement on
the technology with Toshiba Corp. for manufacturing. The venture was then deemed an
infringement on the agreement between Canon and Nano-Proprietary. Nano-Proprietary claimed that the licensing deal did not extend to Toshiba Corp.

"Canon's recent restructuring of SED as a wholly owned subsidiary is
ineffective to prevent termination because this effort to cure the breach was
not undertaken within a reasonable time. It occurred more than a year and
a half after Canon was on notice of its breach." commented Judge Sparks on Canon's move to prevent the termination of the agreement.

The production of the SED display was anticipated to boost Canon's revenue,
with the company trying to get its foot in the door of the $84 billion
flat-panel display market. Because of its new presence in the scene,
Canon had extended out its license to the SED technology in order to acquire
more experienced flat-panel manufacturers

According to Reuters, the Tokyo-based company reassessed its plan to build a 180 billion Yen ($1.48 billion USD) factory in Western
Japan for flat-panel mass production.Even with the latest news in the lawsuit, Canon still aims to produce SED panels at a smaller site and wants to keep Japan availability
for the fourth quarter of this year.